Disclosure: Financial Investigative Media Limited, which is not owned by Tom Winnifrith but by a trust for his dependants, owns shares in companies mentioned in this article. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
Premaitha (NIPT) has updated on trading in the year to March 31 2017. Of course, what matters is not historic trading but the future, that is to say the patent challenge by US corporate fascist bully-boys Ilumina. However, some numbers do matter.
The year in question includes just 29 days of Yourgene Bioscience which was bought on 2 March. Test volumes increased by 40% to over 24,000 and sales were 24% up at £3.1 million. But remember that £750,000 of sales to Genoma that has had to be provisioned. Cut that out and like-for-like revenues from continuing customers grew by 250%. There is 12 month pro forma revenues, including Yourgene Bioscience, of c.£5 million with a gross margin of 35% (up from 29%) which will improve again this year thanks to scaling-up and cost reductions.
This year will clearly be much better. For instance, the first IONA test laboratory installation for the major European diagnostics services customer announced in February is on track for June, with a further installation for the same customer due later this year.
Clearly Premaitha lost money last year, but the rapid gearing up of sales on decent margins will narrow that loss big time this year and profitability is in sight. That is all good and in normal circumstances the shares would be flying, not sitting at 10.125p.
The elephant in the room is Illumina. Premaitha says it is confident of making progress on this soon. If it does the shares will rocket. We believe that it will and thus while you would not bet the ranch on it as the risks are clear, we still rate the shares a buy.
This article first appeared on HotStockRockets, where two emergency share tips were published last week. For those, and to catch the next red hot share tips from the HotStockRockets team out shortly, for just £5 click HERE
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